Required: Read the following case study and answer all the question.

Silulo Ulutho Technologies: Luvuyo Rani

A Khayelitsha-based company adjusts its business model twice to suit

the market, and reaps its rewards.

In 2004, Luvuyo Rani opened Silulo Ulutho Technologies, a company that

provided local teachers with refurbished computers. It didnt take long to realise that his target market did not understand the technology, and so he opened an Internet caf to create a space where he could place the refurbished PCs, and provide the residents of Khayelitsha with a place to access the Internet and learn about computers. And no one came. The caf was losing money hand over foot, and Luvuyo and his partners were simply hoping people would come.

We realised we had recognised a market but that the market hadnt recognised itself, he says. People need technology, but we were pitching to a market that simply didnt know how to use what we were offering.

And so Silulo added training courses to its business model. At first the courses were ad hoc an hour or two each day at the Internet caf. It soon became clear that in trying to create a market for their products, Silulo had actually struck on a business offering the marketplace was desperate for. Today Silulo operates 18 training centres across the Western Cape. Courses run for six months at a time, 8am to 5pm.

MWeb has taken notice of the business and refurbished five centres as part of its ED programme. This second revenue stream has lower costs than the Internet caf, and is more profitable.

You cant be too precious about your business model, Luvuyo says. Sometimes you need to adjust your offering to suit the market. You cant expect the market to adjust to you, simply because you are offering something. Find what they want or need, and then give them a solution.

Answer the following questions based on Luvuyos Silulo Ulutho

Technologies:

1. Describe the term positioning and the importance of differentiation. (5 marks)

2. Based on the case study, it is clear that Luvuyo had to realign its product elements to enhance the satisfaction and needs and wants of its already defined market. Discuss the reasons why Silulo Ulutho Technologies were in need of repositioning. (5 marks)

3. Companies have many different bases to differentiate a marketing offer. Identify and explain the three most applicable bases for differentiation, with examples in the case study, that Silulo Ulutho Technologies employs. (9 marks)

4. What are the factors Luvuyo had to consider in the process of repositioning its product offering? Provide examples. (6 marks)

5. If you were Luvuyo Rani, what advice would you give an entrepreneur on the positioning? (5 marks)